Government Measures to Mitigate Covid-19 Risk
Adjustment of LTV/FTV ratio on Housing loans/financing
(effective from 1st March 2021 until 31st December 2021)
Bank Indonesia relaxes he Loan/Financing-to-Value (LTV/FTV) ratio on housing loans/financing to maximum 100% on all residential property (landed houses,
apartments and shop houses/office houses) for banks meeting specific NPL/NPF criteria, and repealing regulations on the gradual liquidation of partially
prepaid property to stimulate credit growth in the property sector, while maintaining prudential principles and risk management,
Policy Objectives and Background
a. In response to the latest global and domestic developments, Bank Indonesia is maintaining an accommodative policy mix in line
with efforts to stimulate economic recovery and maintain financial system stability.
b.
C.
d.
Considering the need to stimulate recovery, particularly in the property sector, and considering the sector has strong backward
and forward economic linkages.
The amendment also takes into consideration the contained credit/financing risk in the property sector.
The LTV ratio is set at an upper limit of 100% for banks meeting the NPL/NPF requirements and regulations concerning the
liquidation of partially prepaid property (inden) are being relaxed, which must comply with prudential principles and risk
management.
a. Changes to LTV/FTV Ratio on Non-Green Property Loans/Financing
Current Regulation
NPL/NPF Criteria Met
Property
Loans Financing
NPL/NPF Criteria Not Met*
Property
Loans/Financing
Property
Financing based
on MMO and
IMBT Contracts
Facility
based on
Murabahah and
Istishna Contracts
1
22
Property
Financing based
on MMO and
IMBT Contracts
1
22
based on
Murabahah and
Istishna Contracts
1
2 23 1
2
Landse HouSO
Type>70
Type>21-70
85%
90%
Type ≤21
-
|85% 75%|
-
90% 85% 75% 65% 90% 80% 70%
95%
85% 75%
New Regulation
NPL/NPF Criteria Met
Property
Loans/Financing
NPL/NPF Criteria Not Met*
Property
Loans/Financing
based on
Murabahah and
Istishna Contracts
1
Property Financing
based on MMO
and IMBT
Contracts
Facility
based on
Murabahah and
Istishna Contracts
1
22
Property Financing
based on MMO
and IMBI
Contracts
1
22
2 23 1
2 23
Landec House
Type>70
Type >21-70
Type ≤21
100%
Apartment
Type >70
100% 100% 100% 100% 95% 90% 90% 95% 90% 90%
100% 100% 100% 100%
95% 95% 95% 95% 95% 95%
100
100
100% 100% 100%
%
%
95% 95%
95% 95%
85%
90%
85% 75% 65% 90% 80% 70%
Type>21-70
90%
90%
Type 521
90%
90%
Shop
House/Office
90%
90%
95% 85% 75% 95% 85% 75%
85% 75%
85% 75%
85% 75%
-
85% 75%
Apartment
Type >70
Type >21-70
Type ≤21
100%
100%
100% 100%
100% 100%
100% 100% 100%
100%
100%
100%
95% 95%
House
95% 90% 90% 95% 90% 90%
95% 95% 95% 95% 95% 95%
100
100
%
%
95% 95%
Source: Bank Indonesia
denotes LTV ratio policy at bank discretion
2. Based on PE No. 21/13/PB/2019
Notes:
1.
Shop House Office
House
100%
100% 100%
100%
95% 90% 90% 95% 90% 90%
*) NPL NPF Criteria
1.
2.
Gross NFL/NPF ratio <5%; and
Net NPLANPF ratio on property cans/financing <5%
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